One Boulder councilman could swing vote on 'not ideal' muni options

Hundreds of citizens have weighed in on city's 7-year effort to leave Xcel Energy, form greener local electric utility

By Alex Burness

Staff Writer

Posted:
04/15/2017 04:38:20 PM MDT

Updated:
04/17/2017 11:18:29 PM MDT

Xcel Energy crews work on power poles off Baseline Road in Boulder earlier this month.The coming days could prove decisive in how Boulder proceeds toward creating its own utility independent of Xcel. (Paul Aiken / Staff Photographer)

More info: More than 200 people had emailed the city on the topic as of Friday afternoon, and many others are expected to address the City Council during Monday's hearing. The council will vote following the hearing, though that vote could take place either late Monday night or during a meeting that begins 6 p.m. Tuesday. Both Monday and Tuesday's proceedings will be broadcast live online and on television by Boulder Channel 8.

Boulder's municipalization effort has come down to three different paths, and the City Council, which must choose one this week, isn't particularly excited about any of them.

Interviews with all nine members ahead of a public hearing and council vote set for Monday — and possibly to be continued until Tuesday — revealed as much, and also indicated the swing vote may well end up in the hands of Sam Weaver, the council member closest to the issue.

Boulder has been thwarted repeatedly in court since voters first approved in 2010 the tax that supports, at a rate of about $2 million per year, the city's bid to separate from incumbent electric provider Xcel Energy and form a municipal utility.

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It was announced March 31 that Xcel has offered Boulder two settlement offers that would bring different versions of closure to the complex and oft-challenged seven-year course.

The first would involve Boulder buying out the company's local system in order to finally municipalize. This course could cost the city up to an estimated $900 million, an amount that city financial staff has suggested Boulder cannot afford without huge risk. Xcel and the city disagree fundamentally on the fairness of this proposition, and no council member appears to regard the buyout as a legitimate option.

That leaves two choices: settle with Xcel and establish what's being called a partnership in which the city remains Xcel's customer, but works with the company on special projects that help move Boulder toward its goal of 100 percent renewable electricity citywide by 2030; or reject the partnership plan and press on in court before the state Public Utilities Commission, where near-term prospects for the city appear dim.

City staff, Xcel and some council members have stressed in recent days that the vote this week will not, in fact, be between these options, but rather between requesting a "pause" at the PUC and moving to place a settlement on the 2017 ballot.

The pause route would allow Boulder to put competing ballot measures, one for a partnership settlement and another for continuing the municipalization effort, to voters in November.

"What I like is giving the choice to the public," Councilwoman Jan Burton said. "I'd really like to have two things on the ballot that they can vote for."

Burton, a first-term council member, is joined in that view by fellow first-term members Aaron Brockett and Bob Yates, as well as Mayor Pro Tem Andrew Shoemaker.

"I think it's prudent to check in with the voters and to avoid further losses until the voters get a chance to speak," Shoemaker said. "Every day, we're losing money, and every day we spend fighting when we're doing something that was not anticipated by the voters without checking in with them first — that concerns me."

The unmet expectations Shoemaker mentioned concern the disappointment he and others have about the amount of time and money municipalization has taken just to reach the point of possibly winning approval at the PUC before moving on, theoretically, to several other court hurdles that could drag on for another five or 10 years.

Quest for 100-percent renewable electricity

The 2030 goal looms large over this week's decision. Roughly half of Boulder's carbon emissions come from electricity, and while the city could accelerate toward its 100-percent-renewable goal under a municipal utility, there's no guarantee it would be able to win control of the local distribution system until at least 2022 and possibly several years later.

"I think we're pretty clear that if we had a municipal utility, we'd be allowed to buy power from anyone we wanted to," Weaver said during a meeting Thursday with city energy director Heather Bailey and Daily Camera staff. "If we're a muni, the path is very clear."

The timeline and costs associated with reaching the first step on that path, however, is much less clear, as Bailey stressed during a council study session April 5.

Several council members said they're reluctant to vote in favor of a pause and potential partnership until Xcel can lay out exactly how the partnership gets Boulder to its 2030 goal.

By that year, the company hopes to have a statewide portfolio of roughly 50 percent renewables, and Xcel-Colorado President David Eves has made clear that the company cannot provide the certain roadmap to Boulder's 2030 goal that many would like to see written within the partnership plan.

"The only thing that would make me change," said Councilwoman Mary Young, who is inclined to vote against the pause and in favor of continued litigation, "would be a different offer."

The company's partnership offer to Boulder includes 10 megawatts of solar gardens and a chance to pay a premium for 25 megawatts of renewable energy through Xcel's Renewable*Connect program.

"And then we'd have an opportunity for conversations about the many, many remaining megawatts to get us to 100 percent," Jones said, of a half-Xcel and half-Boulder advisory board that would be established through the partnership.

"I wish the deal Xcel was offering us was a whole lot better than it is."

Councilwoman Lisa Morzel would not comment on the upcoming decision beyond saying she looks forward to hearing from the public, but her previous comments on Xcel and municipalization would make her voting in favor of a pause a surprise to many members of the public and to her colleagues.

Jones wouldn't commit to voting in any direction, but she did say "you know my history" several times in an interview.

"I'm leaning," she said at another point.

Councilman Matt Appelbaum was the only member who stated their position definitively, ahead of the public hearing and vote, though Yates, who in October called for a settlement with Xcel, was also fairly direct in his comments.

"I would continue the PUC process, even though I'm painfully aware that the PUC does not look positively upon our application," Appelbaum said.

"The offers from Xcel are just not acceptable in any way. The buyout is absurd. It's completely absurd.

"And you could make a case for stopping, pausing, if you had an offer that was really good," he said, commenting on the partnership proposal. "But it's not. It's a basic franchise agreement with nothing of substance added to it."

He called the number of megawatts Boulder could see through solar gardens and Renewable*Connect in a partnership "laughably tiny."

If Jones, Morzel, Young and Appelbaum do vote against the settlement options, that leaves Weaver, who has been mum on his position, as the deciding vote.

A weighty decision

Weaver, like many on the council, is a staunch environmentalist, and his interest in municipalization, he says, motivated him to run for a council seat in the first place. He and Shoemaker were on the city's negotiating team during settlement talks with Xcel over the past 15 months.

The most ardent municipalization supporters look to Weaver as their primary advocate and subject expert on the council.

He is aware of the weight to which many of his constituents place on his decision this week, and said, "I'm thinking hard about this."

"I didn't get elected to get re-elected," he added. "I'm not going anywhere with this, particularly, afterwards."

His term expires in November, and he has said in interviews that his decision to seek re-election, or not, will be informed by where Boulder stands with regard to municipalization.

Weaver is among those who remain unconvinced the partnership could get Boulder to its 2030 goal.

"But it's the best we can do right now with the actors we have at the table," he said. "It's Xcel's offer to make and it's Xcel's offer to modify."

He said Thursday that he'd be speaking with Eves Friday about the partnership scenario, but did not comment when asked Friday how that planned discussion went, or whether it had prompted him to decide how he'll vote.

Eves and several senior staffers also met with the Camera last week, and during that meeting he suggested that the partnership plan is a limited-time offer.

"I don't know that the same offer would be on the table," he said, before specifying later in that conversation that the Renewable*Connect detail would be pulled from a future settlement offer.

If Xcel is serious about the partnership, at least in this specific form, being now-or-never, Boulder's risk along the non-pause path is compounded: Should the city stay in court but not advance before the upcoming election, and should voters reject an extension of the $2 million-per-year tax funding the effort, Boulder could enter 2018 without a citizen mandate to continue municipalization and with less negotiating leverage than it has today.

Boulder voters have always come through for municipalization, however, siding with the city in all six ballot measures related to the bid since 2010. But support for the city's course appears to be waning, as a recent Camera poll showed more voters reporting a change in attitude over time from "for" to "against" than vice-versa.

Meanwhile, at the PUC

If the council votes against the pause and decides to continue with litigation before the state PUC— scheduled to preside over a trial beginning April 26, to hear the city's latest application related to the transfer of Xcel assets to Boulder — success in that direction is far from guaranteed.

That separation plan detailed in Boulder's application has been heavily criticized by nearly every party in the case, and the PUC itself has raised serious questions about whether it even has the authority to grant Boulder the permission it seeks.

Both Xcel and IBM have filed motions to dismiss Boulder's application, and the PUC is set to rule on those motions Wednesday — which happens to be the deadline for Boulder to request that its upcoming trial be vacated.

IBM's motion to dismiss the application suggested that if a city utility ended up having any significant interruption, it would "likely compromise local, state and national security."

The motion stated that "even just the threat of diminished reliability to IBM's Boulder facility would force IBM to consider migrating operations and workforce away from Boulder."

The city on March 30 filed a rebuttal at the PUC, stating that it could support a separation of assets controlled by Xcel. This statement represented a reversal on a key issue of the municipalization case, and the PUC may find that the change of course is too dramatic to be considered on April 26.

"Boulder literally presented an entirely new approach," PUC staff wrote in a response to the city and to the motions to dismiss. "It will take substantially longer than the 27 days between March 30 and April 26 to property vet Boulder's latest proposal."

In so many words, most council members said they weren't confident in either staying the PUC course or taking a settlement to the voters.

"They're definitely not ideal options," Young said.

The conflicted collective feeling is evidenced by the fact that Appelbaum, the most committal among the nine interviewed, said of the course he'll vote for: "It will almost certainly be negative" in the short term.

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